Dave McClure: Buying A House Is Far More Risky Than Investing In Startups

Dave McClure,500 startups,investing,startup news, TWiSTStartup people love to hear about Dave McClure the founder of 500 Startups and early stage investor. Most clamor at the opportunity to get just a glimpse of facetime with him and everyone hopes that their startup makes it into the 500 program so they can learn from one of the masters.

A lot of people love to hear him speak because his speeches and appearances are always riddled with curse words, GASP, but really he’s just using language that allows him to communicate as fast as his brain is moving.

In talking with a mutual friend who grew up with Dave McClure, the friend said “Dave is like a whirlwind, like the tasmanian devil. I used to worry that his brain would explode”.

So needless to say people listen because McClure is always making great points. One of those points was in his appearance last month on This Week In Startups (TWiST).

While everyone is waiting for the SEC to stop twiddling their thumbs on crowdfunding, McClure was talking about what a pain in the ass it is for someone to invest in startups and get “accreditation”.

It’s much easier to buy a house than it is to invest in a startup, but as McClure pointed out in the interview with Jason Calicanis, buying a house is a far more risky endeavor.

There’s a certain amount of money that anyone should be able to fucking burn or blow on startups. We encourage a ridiculous amount of money to go into the residential real estate market which has burned people fucking terribly in the last five years. Ridiculous numbers of people in this country are upside down on their mortgages and bankrupt because legitimate, regulatory-approved agents have shoved real estate fucking mortgages down their throats. We have subsidized this with our tax dollars, we are the people.

Like you fucking blame the investment bankers? Fuck You.

It’s you voting for your representatives who are in the pockets of Sallie Mae Ginnie Mae, Fannie Mae, whatever who are shoving shit down the pipe. Like Moody’s and all these other people who have crap verification. . .

If you want to protect the small investor, don’t let them buy a house in this country, because that is the most dangerous thing you can do with your money. Period.

Investing in startups which might fail? You only lose $1. You invest in a house, you put 5% down or sometimes 0% down and you can lever up a ridiculous amount of money. You can lose 20 times your investment and people do it every day and they think it’s a good idea. McClure said on the show.

When you trace back the super genius that is Dave McClure, Sith Lord of 500 Startups you’ll come to find that he isn’t some Zillionaire throwing money at startups for fun. He’s done well for himself but he’s still raising money as fast as he’s investing it. Sure, like everyone else he wants to make money but he’s looking more at making an impact on the world through the technology companies he and his partners touch.

Many people don’t realize that even if they saved up say $50,000 over the course of two years to do some small angel investments, if they’re only making $150,000 they can’t technically be an accredited investor. Of course they could put a down payment on a house, or two.

See the TWisT here.

Source: Ian Kennedy’s Everwas

We’ve got more from 500 Startups here.

Want To Get Into Investing? Start With $1 And KC Startup TreeSwing [video][sxsw]

TreeSwing,Kansas City startup,KC Startup,investing,startup interview,sxsw,sxswiIf you’ve always wanted to start an investment portfolio, but getting thousands of dollars together was out of reach, than you’re in luck. A new Kansas City startup, TreeSwing, is releasing a mobile app that will allow investors to start investing in mutual funds with as little as $1.

If the company takes off, TreeSwing will open up a new world of investing to people across the country, with no brokerage fees, no minimum balances, and no required monthly investment, investors can contribute any amount they’re comfortable with.

TreeSwing will allow investors to select from a marketplace of professionally managed mutual funds offered by some of the top names in the industry. By keeping the marketplace purposefully small, using plain language, and providing independent data from Morningstar, TreeSwing aims to give investors an easy way to make informed choices.

According to Brian Smith , Design and Product Manager for the TreeSwing application, the app was created specifically to serve the millions of Americans who aren’t currently investing.

“I believe we’ve built something that will lower the financial, behavioral, and emotional barriers to the investment process,” said Smith.

We ran into TreeSwing a bunch of times while in Austin for South By Southwest. Their entire team was at the TechCocktail celebration of startups event at The Stage on Sixth, talking to people about their new way of investing.

We finally caught up with Smith at the SXSW trade show who took a little time to explain TreeSwing in the video below.

While crowfunding is gaining world wide popularity, TreeSwing offers an option for people who want to get their feet with with investing, at a much lower risk and barrier to entry.

Check out the video below and for more info visit TreeSwing.com

Check out all these other great startup stories we found at SXSW 2013

Justin Bieber On The Cover Of Next Months Forbes Magazine As Venture Capitalist?

Forbes is publishing their “Celebrity 100” list in their next issue. The June issue which is making it’s way to stores now features Oprah Winfrey in her spot at the top of the list. Number three is singer Rihanna and now in the number two spot, and on the cover of the issue, Teen mega-star Justin Bieber.

Justin Bieber is trying desperately to not be a dying teenage pop star. He’s also kept his image clean for the most part and hasn’t succumbed to the gossip rags the way that Britney Spears, Lindsay Lohan and even Miley Cyrus have in recent days.

Bieber has recently jumped on the startup investment bandwagon. His portfolio isn’t nearly as robust as say Ashton Kutcher, but he’s not nearly as tech/startup savvy as the Two and A Half Men star either (Yet).

Bieber tells Forbes that his manager Scooter Braun has a team of people that help “the biebs” invest in startups. Bieber told Forbes magazine:

“Scooter has a team that helps find investments. Usually we work together. If I find something, I bring it to the table.”

Forbes Zack O’Malley Greenburg says that Bieber takes a Peter Lynch approach to investing with the artist adding: “I’m not going to invest in something I don’t like; I have to believe in the product”. Bieber’s manager said that philosophy has led Bieber to invest millions into 12 startups. Forbes was able to verify four of those including Tiny Chat, New York startup Stamped, Sojo Studios and Spotify.
Bieber also talked on video about his investing in social charity startup WeTopia, which Bieber described as a “Farmville” with real money going to people who need it.
O’Malley Greenburg, makes it clear that unlike other celebrities Bieber isn’t doing endorsement for equity deals, rather he’s investing real money into startups.
Braun is very protective of Bieber’s startup portfolio but says that all of his investments are still in business. The investing came about when Braun realized that Bieber was too young to sell vodka and his fans wouldn’t buy $150 pairs of shoes. What Bieber did know very very well was web 2.0 and social media. That’s why they’ve invested in web based startups like Spotify and WeTopia.
Braun said that Bieber’s startup portfolio was reflective of 2-5% of his net worth and Forbes estimated that to about $3 million dollars.
Bieber has supported other companies like Tosy a company that’s making an entertainment robot. There’s no word as to whether Bieber is invested in Tosy or he was just doing an appearance for them at this year’s International Consumer Electronics Show.
Bieber’s longtime girlfriend singer/actress Selena Gomez is also involved in startups like Postcards On The Run that allows you to send physical postcards from  your mobile device.
Check out the entire story at Forbes Magazine

St. Louis Arch Angels Invest $3 Million In 2011

We love angel funds with great names like Arch Angels (get it St.Louis, Arch, Arch Angels?). The group of investors that has been around since 2005 announced their biggest year in funding was 2011 with $3 million in investments in a variety of early stage sectors.  Their investments range from health technology, to beverages and even backing a downtown St. Louis accelerator fund.

The angel group has 47 members and have invested $26 million in 28 companies since their founding in 2005.

Their leading investments in 2011 were $500,000 to Pulse Technologies. The health care company is working on developing a medical device to boost the effectiveness in clot dissolving drugs.

The groups second largest investment was $173,000 in a beverage company developed by Robert Paul, a neuropsychologist who after hearing about brain drinks decided if it was going to be done right he would do it himself. Arch Angels investment was part of a $900,000 round that also included former executives of Anheiser Busch.

Arch Angels other investments were in two more medical companies, Katalyst Surgical which received $123,000 for opthalmic instruments and $220,000 in Venti a medical device company focused on diseases of the veins.

They also contributed $375,000 to Capital Innovators the downtown accelerator fund. Capital Innovators has backed 12 startups that showed off their projects at a demo day held in the beginning of the month.

source: Stltoday.com